Overview
Investment Strategy
The goal of the Portfolio is to provide investors access to attractive investment opportunities among large cap, durable, well-managed businesses, primarily in the U.S. We seek to purchase these businesses at value prices and hold them for the long term. This approach can make the Davis Large Cap Value SMA a potential foundation for an investor's diversified equity portfolio.
Using our signature Davis Investment Discipline, the Portfolio has outperformed the S&P 500® Index since its inception in 1969: A hypothetical $100,000 investment has compounded to $29.7 million vs. only $27.5 million for the S&P 500® Index.The S&P 500 Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The index is adjusted for dividends, weighted towards stocks with large market capitalizations and represents approximately two-thirds of the total market value of all domestic common stocks. Investments cannot be made directly in an index.
"By being highly selective and rejecting the vast majority of companies in the index, we’ve uncovered businesses with highly attractive earnings growth, yet selling at some of the lowest valuations we have ever seen. We believe this sets the stage for attractive returns in the years ahead.”
– Portfolio Manager Chris Davis
| Selective | Attractive Growth | Undervalued |
|---|---|---|
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Large Cap Value SMA Portfolio invests in only a select group of well-researched companies |
Large Cap Value SMA Portfolio's portfolio companies have grown more than the index The Attractive Growth and Undervalued reference in this piece relates to underlying characteristics of the portfolio holdings. There is no guarantee that the Fund’s performance will be positive as equity markets are volatile and an investor may lose money. |
Large Cap Value SMA Portfolio's portfolio companies are 38% less expensive than the index |
| Holdings The number of holdings in the Portfolio excluding cash positions. | EPS Growth (5 Year) Five-Year EPS Growth Rate is the average annualized earning per share growth for a company over the past five years. The value for the portfolio is the weighted average of the five-year EPS Growth Rates of the stocks in the portfolio. Approximately 2.10% of the assets of the Portfolio are not accounted for in the calculation of 5-year EPS as relevant information on certain companies is not available to the Portfolio’s data provider. The 5-year EPS of the S&P 500 is 16.9%. | P/E (Forward) Forward Price/Earnings (Forward P/E) Ratio is a stock’s price at the date indicated divided by the company’s forecasted earnings for the following 12 months based on estimates provided by the Advisor’s data provider. These values for both the Portfolio and the Index are the weighted average of the stocks in the Portfolio or Index. The Forward P/E of the S&P 500 is 23.7x. |
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Portfolio
S&P 500
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Portfolio Details as of 9/30/24
| Detail | Value |
|---|---|
| Objective | Long-Term Capital Appreciation |
| Category | Large Cap Value |
A Shares
| Detail | Value |
|---|---|
| Inception Date | 4/1/69 |
| Benchmark | S&P 500 |
Performance as of 9/30/24
Growth of $100,000 (Net a 3% maximum wrap fee)
Key Takeaway A hypothetical $100,000 investment has compounded to $29.7 million since inception (net a 3% maximum wrap fee).
Percentage of Time the Large Cap Value SMA Portfolio Has Outperformed the Market
Outperforming the Market. The chart shows the percentages of time that the Davis Large Cap Value SMA Composite has outperformed the S&P 500 Index for each of the rolling periods indicated from April 1, 1969 through 9/30/24. The average annual total return earned by Davis Advisors’ Large Cap Value SMA Composite was compared against the return earned by the S&P 500 Index for rolling time periods ending December 31 of each year. The Composite’s returns assume an investment in the Composite on January 1 each year, with all dividends reinvested for the time period. The Composite’s returns are presented gross of advisory fees and do not include other expenses, such as a wrap sponsor fee. If those other expenses were included, the reported figures would be lower. There can be no guarantee that Davis Advisors’ Large Cap Value strategy will continue to deliver consistent investment performance. The performance presented includes periods of bear markets when performance was negative. Equity markets are volatile and an investor may lose money.
(4/1/69 - 9/30/24)
Key Takeaway As shown, the probability of outperformance has increased the longer an investor has stayed with us.
Average Annual Returns
A Shares: Quarterly (as of 9/30/24)
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| Share Class | YTD* | 1 Yr | 3 Yr | 5 Yr | 10 Yr | Since Incep | |
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Gross | 17.40% | 34.90% | 9.21% | 13.81% | 11.35% | 12.42% |
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With a 3% maximum wrap fee | 14.83% | 31.00% | 6.00% | 10.47% | 8.08% | 10.80% |
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S&P 500 | 22.08% | 36.35% | 11.90% | 15.96% | 13.37% | 10.64% |
The performance presented represents past performance and is not a guarantee of future results. Total return assumes reinvestment of dividends. Investment return and principal value will vary so that an investor may lose money. Current performance may be higher or lower. The investment strategies described herein are those of Davis Advisors. These materials are being provided for illustrative and informational purposes only. The information contained herein is obtained from multiple sources that are believed to be reliable. However, such information has not been verified, and may be different from the information included in documents and materials created by the sponsor firm in whose investment program a client participates. Some sponsor firms may require that these materials are preceded or accompanied by investment profiles or other documents or materials prepared by such sponsor firms, which will be provided upon a client’s request. For additional information, documents and/or materials, please speak to your Financial Advisor. For additional information, documents and/or materials, please speak to your Financial Advisor. Davis Advisors fee schedules are described in Part 2 of its Form ADV.
Portfolio Characteristics as of 9/30/24
Portfolio Composition
| Item | Large Cap Value SMA Portfolio | S&P 500® |
|---|---|---|
| P/E (Forward) Forward Price/Earnings (Forward P/E) Ratio is a stock’s price at the date indicated divided by the company’s forecasted earnings for the following 12 months based on estimates provided by the Advisor’s data provider. These values for both the Portfolio and the Index are the weighted average of the stocks in the Portfolio or Index. The Forward P/E of the S&P 500 is 23.7x. | 14.7x | 23.7x |
| P/B Ratio Price/Book (P/B) Ratio is the weighted average of the P/B ratios of the stocks in a portfolio. The P/B ratio of a stock is calculated by dividing the current price of the stock by the company’s per share book value. Stocks with negative book values are excluded for this calculation. | 3.0 | 4.9 |
| Beta (3 Year) | 1.0% | 1.0% |
| 5 Year Earnings Growth | 18.2% | 16.9% |
| Standard Deviation (5 year) Standard Deviation is a measure of the average deviations of a return series from its mean; often used as a risk measure. A large standard deviation implies that there have been large swings or volatility in the manager’s return series. | 20.5 | 18.0 |
| Number of Holdings | 28 | 503 |
| Weighted Average Market Cap ($bn) Weighted Average Market Capitalization is the portfolio-weighted mean capitalizations of all equity securities. | 401.4 | 946.2 |
| Median Market Cap ($bn) Median Market Capitalization is the midpoint of market capitalization of the stocks in a portfolio. | 64.3 | 38.2 |
| Active Share Active Share is a measure of the percentage of stock holdings in a manager's portfolio that differ from the benchmark index. | 83% | N/A |
| Turnover Rate Turnover Rate is a measure of the trading activity in a portfolio that reflects how often securities are bought and sold. These amounts are as of 09/30/24. | 19% | N/A |
Mastering the Mental Game of Investing
A video series to help you develop the mindset of a successful investor.
Watch the SeriesPortfolio Holdings The information provided in this material should not be considered a recommendation to buy or sell any particular security. There is no assurance that any of the securities will remain in an account at the time this material is received or that securities sold have not been repurchased. It should not be assumed that any of the securities were or will prove to be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein.
Top 10 Holdings: Quarterly (as of 9/30/24)
| Holding | Ticker | Large Cap Value SMA Portfolio | S&P 500® |
|---|---|---|---|
| Berkshire Hathaway | BRK B | 7.0% | 1.7% |
| Capital One Financial | COF | 7.0% | 0.1% |
| Meta Platforms | META | 7.0% | 2.6% |
| Applied Materials | AMAT | 6.9% | 0.3% |
| Viatris | VTRS | 5.2% | < 0.1% |
| MGM Resorts | MGM | 5.2% | < 0.1% |
| Wells Fargo | WFC | 5.1% | 0.4% |
| Amazon.com | AMZN | 5.0% | 3.6% |
| Humana | HUM | 4.9% | 0.1% |
| Alphabet | GOOGL | 4.5% | 3.7% |
| Total | 57.8% | 12.5% | |
All Holdings: Quarterly (as of 9/30/24)
| Holding | Ticker | Large Cap Value SMA Portfolio | S&P 500® |
|---|---|---|---|
| Berkshire Hathaway | BRK B | 7.0% | 1.7% |
| Capital One Financial | COF | 7.0% | 0.1% |
| Meta Platforms | META | 7.0% | 2.6% |
| Applied Materials | AMAT | 6.9% | 0.3% |
| Viatris | VTRS | 5.2% | < 0.1% |
| MGM Resorts | MGM | 5.2% | < 0.1% |
| Wells Fargo | WFC | 5.1% | 0.4% |
| Amazon.com | AMZN | 5.0% | 3.6% |
| Humana | HUM | 4.9% | 0.1% |
| Alphabet | GOOGL | 4.5% | 3.7% |
| Texas Instruments | TXN | 4.5% | 0.4% |
| U.S. Bancorp | USB | 3.6% | 0.2% |
| Cigna Group | CI | 3.5% | 0.2% |
| Teck Resources | TECK | 3.5% | — |
| Owens Corning | OC | 2.8% | — |
| Markel Group | MKL | 2.7% | — |
| Intel | INTC | 2.1% | 0.2% |
| Solventum | SOLV | 2.1% | < 0.1% |
| Quest Diagnostics | DGX | 2.0% | < 0.1% |
| Bank of New York Mellon | BK | 1.9% | 0.1% |
| Chubb | CB | 1.9% | 0.2% |
| Microsoft | MSFT | 1.8% | 6.6% |
| Tyson Foods | TSN | 1.3% | < 0.1% |
| JPMorgan Chase | JPM | 1.3% | 1.2% |
| ConocoPhillips | COP | 1.2% | 0.3% |
| AGCO | AGCO | 1.2% | — |
| IAC | IAC | 1.1% | — |
| Darling Ingredients | DAR | 0.7% | — |
| Cash | N/A | 3.0% | — |
Sector Allocation The Global Industry Classification Standard (GICS®) is the exclusive intellectual property of MSCI Inc. (MSCI) and S&P Global (“S&P”). Neither MSCI, S&P, their affiliates, nor any of their third party providers (“GICS Parties”) makes any representations or warranties, express or implied, with respect to GICS or the results to be obtained by the use thereof, and expressly disclaim all warranties, including warranties of accuracy, completeness, merchantability and fitness for a particular purpose. The GICS Parties shall not have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of such damages.
| Sector | Large Cap Value SMA Portfolio | S&P 500® |
|---|---|---|
| Financials | 31.5% | 12.9% |
| Health Care | 18.2% | 11.6% |
| Information Technology | 15.8% | 31.7% |
| Communication Services | 13.0% | 8.9% |
| Consumer Discretionary | 10.5% | 10.1% |
| Industrials | 4.1% | 8.5% |
| Materials | 3.6% | 2.2% |
| Consumer Staples | 2.1% | 5.9% |
| Energy | 1.2% | 3.3% |
| Utilities | — | 2.5% |
| Real Estate | — | 2.3% |
Market Cap Breakout The Adviser considers companies with market capitalizations over $10 billion to be large-capitalization companies, between $3 billion and $10 billion to be mid-capitalization companies, and under $3 billion to be small-capitalization companies.
| Large Cap Value SMA Portfolio | ||
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| Market | Percentage | |
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Large | 96.9% |
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Mid | 3.1% |
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Small | 0.0% |
| S&P 500® Index | ||
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| Market | Percentage | |
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Large | 99.6% |
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Mid | 0.4% |
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Small | 0.0% |
Commentary
Portfolio Commentary
| Document | Description | Date |
|---|---|---|
| Portfolio Commentary - Fall Update 2024 | A quarterly discussion of the market environment, Portfolio performance, major positions and investment opportunities. | September 2024 |
Factsheet
Fact Sheets
| Document | Description | Date |
|---|---|---|
| Fact Sheet | Goals of the Portfolio, top holdings, characteristics and Portfolio attributes. | September 2024 |
Literature
| Document | Description | Date |
|---|---|---|
| Quarterly Review Book | A comprehensive quarterly update on the Portfolio, including commentary on investment strategy, performance, Portfolio statistics and holdings. | September 2024 |
| Davis Large Cap Value SMA: Attractive Growth. Undervalued. World Class Businesses. | Distinguished by companies with earnings growth higher and P/Es significantly lower than the Index – World-class businesses positioned for opportunities in today’s market The Attractive Growth and Undervalued reference in this piece relates to underlying characteristics of the portfolio holdings. There is no guarantee that Fund performance will be positive as equity markets are volatile and an investor may lose money. | September 2024 |
| Davis Large Cap Value SMA: Selective. Attractive Growth. Undervalued. | Our companies are rigorously researched, offer attractive growth and yet are significantly undervalued versus the Index – A powerful combination. | September 2024 |
| Davis Large Cap Value SMA: A History of Outperformance | Discusses the Davis Large Cap Portfolio's growing success in beating the S&P 500® as the holding period increased (ultimately reaching 100%). Past performance is not a guarantee of future results. Review the referenced piece for additional information and disclosures. | September 2024 |
| Portfolio Holdings | Quarterly report listing company positions, weightings in the Portfolio versus the Index | September 2024 |